Finally was able to do a full restore. Turned off passcode. STill got prompted for an Exchange passcode ( was syncing work emails). I turned off the Exchange email account for work email. Not sure if that had anything to do with the original problem. Checked IOS 5 user manual for iPad and it still only referenced 4 digit passcode. Sot this full keyboard pass code problem is either a bug or maybe my Exchange request for passcode was superseding the IOS5 request for passcode. Will wait a few weeks and see if anyone else comments before turing iPad passcode back on.